Needs vs. Wants

Sure, as Captain Average states, we have grown our income to what many would consider “above average”. However, that didn’t happen by chance and it certainly didn’t happen over night. We had to claw our way up from “below average” incomes and it required a ridiculous amount of hard work and dedication to get there.

Regardless, Captain Average misses the point. We aren’t arguing that the typical family making the median income can or should do what we are doing. What we are saying is it is entirely possible if you aren’t afraid of making some focused life choices and perhaps doing some things a bit differently. We are also sharing our journey to show you one version of what is possible.

My guess is that if you are reading this blog, you are open to following a different path.

Everyone’s journey is a little different so keep in mind that they may not necessarily be the same life choices we have made; you may have to make a different combination of choices to achieve your own unique dreams. Hopefully reading our rants will give you some ideas of what might work (or not work) for you. One thing is for certain….

You cannot allow artificial limits to snuff out your dreams.

A lot of us naturally argue ourselves out of our dreams because we have no real life example of someone else doing it. We see friends, family and coworkers all doing the typical things that result in the small savings rate Captain Average quoted for the average US family. Just think about it. How many people do you know that:

Take out a lease on a vehicle and trade it in for a new vehicle every few years.

Take out a big mortgage for the their house. Because it’s the “best investment you can make”.

Pay for their kid’s college tuition.

Pay for their adult kid’s living expenses.

Pay less than their full credit card balance each month.

Have a big wedding with everyone they ever met (and some they haven’t) in attendance.

Making these kind of choices will yield average results.

How can you expect to buy a house outright by 30? How can you expect to retire 20+ years earlier than everyone else? You have to make different life choices in order to have a different outcome.

If you have a dream that you want to fulfill there is likely a way to achieve it. Don’t talk yourself out of your dream by telling yourself it’s impossible before even exploring the possibilities. If you talk yourself out of it before thinking it through, perhaps then you may not want it bad enough. Instead think about what you could do to achieve it. Come up with creative solutions. Now the solution may involve some degree of sacrifice (in fact it will but we like to look at it like as a “trade” instead of a sacrifice.) and you most likely won’t be able to figure it all out in one day and that’s ok! It could take months if not years to refine your strategy.

Optimize your life by questioning and challenging what is within your realm of control.

Let’s take a look at a few good examples of where you can start; The family median spending on “Needs”:

Now to dig in to the nitty gritty.

Vehicle / Gas / Maintenance:

First ask yourself the question. Why is more than 20% of my income going to transportation? If the main answer is to get to work that feels a little silly. Think about it. Assuming a 10 hour work day, you are spending 2 hours of work time just to PAY for the privilege to commute to work. That doesn’t even factor how much time wasted actually getting to and coming from work. Maybe instead of labeling this as a need, you should consider other options; like living closer to your job or taking public transportation. Or worst case scenario, maybe the car you are driving is just too expensive; you should consider owning something more economical (cheaper in gas, maintenance and total price).

Tell the Excuse Monster to shut up! Kick it in the face. I can already hear it nagging you. It’s saying: “but I enjoy driving! I like my car!”

To that I respond that it isn’t a need anymore it’s a want. Put it in the “want” column and own it at that. Because you are making a choice that the happiness you receive from owning that car is greater than the time spent to obtain and keep that car by working.

Housing / House expenses / Utilities, fuels and public services:

Is the place you are living in the right size for your income? Is it too big regardless of your income? Maybe you spend too much on heating / cooling? Maybe you need to lower your energy costs by using higher efficiency products or insulating your home. Maybe you need to get a programmable thermostat. Or just acclimate to your home being warmer or cooler while at home. I can’t answer these questions for you or even think of all of the right questions to ask for your unique situation. But I will tell you to kick your excuse monster in the face. Challenge the Excuse Monster!

Health insurance / Medical costs:

Your employer may not offer you a choice so this is a tougher one. If you do have a choice, DO THE MATH to figure out which one truly is the correct choice. I know many people who blindly pick one without reading the plan during open enrollment. Look at total costs, not just the cost of the plan.

Groceries

Yeah you gotta eat to live but do you really need to be shopping at Whole Foods? Can you handle acclimating to store brands over national brands? Have you comparison shopped between grocery stores in your area. Do you load up when there is a deal on something you normally get? Do you plan your meals out for the week or do you waste a significant portion of what you buy (throw away) like the typical American family?

Now let’s look at the easier list to chip away at…the “Wants”:

I’m not saying that you cut out all of your wants like Captain Average suggests I would say. I’m saying to evaluate what gives you the greatest happiness per dollar. Start cutting things until it hurts. When we cut cable TV we thought it was going to be a big sacrifice. Now we go out on walks and count rabbits in our neighborhood when we get home from work. Before we’d have some nonsense on in the background of every room we were in. If we want to watch something, there is always Netflix which is much more value per hour if you actually use it. ($100 bill versus $10 bill per month).

We strive to be on permanent vacation when we pull the trigger. That’s a “want”, and we own it. We are willing to work longer than we would have to in order to achieve this lifestyle. Are all of your wants really generating happiness in excess of the work required to pay for it?

If you have a dream and you really want to go for it, here are some suggestions for you:

Don’t artificially set limits based on what everyone else is doing

Figure out what you want your life to become

Figure out what it would take to achieve that life

Question everything

Decrease expenses

Grow income

Optimize everything

Grow income

Decrease expenses

Kill the Excuse Monster

I think Captain Average means well, but his way of thinking traps us into staying on the same work / spend treadmill as everyone else.

When was the last time the Excuse Monster kept you from obtaining “above average” results?

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